Every year when December creeps up I start to think about planning my next year. What do I want my next year to look like? What goals do I want to work towards? And most importantly, what do my finances need to look like? What should I be aiming for? Every year I come to the same conclusion: girl, it’s time to raise your rates.
When it comes to contemplating how to raise your rates, the idea can seem overwhelming. Chances are you’re like me and you have some great clients, but many or some of them just aren’t paying you enough. How do you begin to approach that kind of conversation?
If you’re struggling with the same thing I am this year, then here’s my quick guide on how to raise your rates:
Figure Out What Value You Provide
You can’t ask someone to start paying more unless you can prove the value that you bring to the table. Even if you’re making well under what you should be (and many of us are), it can be a real challenge to get someone to cough up more cash. Why would they want to pay you more for the work you already do?
Decide on Your Ideal Client
Having an idea client seems silly at this stage, most of us, especially when we’re just starting out, will take any client—we’ve got bills to pay. But when it comes to starting to raise your rates, hammering out that ideal client is really important. If your current clients don’t fit into that mould, it’s a real problem.
Outline the Raised Rates
When it comes time to raise your rates, you need to be realistic. I have some clients that pay me well over $100 an hour and some that pay me less than $50. If I’ve decided that all of my current clients meet the mould of “ideal client” it’s time to figure out who’s getting what rate raise.
I can’t expect a client that pays me $50 an hour to start paying $100—not if I want to keep them. So, assuming I do, I need to set a strategy to raise everyone’s rates to meet the financial needs of my business. That might look something like this:
- New hourly rate for new clients $150/hour
- Clients at $40 — $55
- Clients at $75 — $90
- Clients at $110 — $125
While ideally, you’ll want to get up to your set rate, it’s a tad bit unreasonable to move someone from $40 to $150.
Offer Upsell Products
Upsell products can be a great way to raise your rate without adding a ton to your plate. For example, you can add-in new services to upsell new and old clients alike.
I occasionally add services like social media content, monthly newsletters or sales automation for clients that I’m already working on other things with. These services aren’t services I go out and sell, but when the need arises I’ll offer them to current clients.
Set a Deadline
The most important part when you go to raise your rates in my mind is the timeline, otherwise, you can end up getting locked in a battle of “let me think about it.” I typically send out my rate raise emails at the beginning of January with a deadline and no option to decline.
I might say something like “I will be raising my rates to $75 per hour starting February 15, 2020.” I try to give enough time for clients to adjust, but not enough that they’ll forget about it and get upset when the bill comes.
How do you raise your rates? Share your tips and tricks in the comments below!
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Tae started out as a journalist before following the money into the corporate world. But it turns out that the grass isn’t always greener and now you can find her spending most of her time writing about all the things she loves. Namely, money, travel and business with a hefty dose of self-deprecating humor. She is a podcast fanatic, blogging aficionado and loves to find new ways to turn passions into cold hard cash!